Australia Music Licensing Issue Could Affect U.S.

Boston — Faced with possible 3,000 percent increases in fees for playing copyrighted music in Australian group exercise classes, Fitness First Australia, a chain of more than 85 health clubs in Australia, recently partnered with The International Health Racquet and Sportsclub Association (IHRSA) to fight back. IHRSA warns that if the increase is successful, American record companies could try to do the same.

“Global music companies are looking for new sources of revenue, as sales in their traditional business — the sale of CDs — have dropped,” Tony deLeede, managing director of Fitness First Australia and a member of the IHRSA board of directors, says in a statement from IHRSA. “The music industry has already had a significant victory with nightclubs in Australia. If music companies have success here raising fees for health clubs, it will have an effect around the world.”

IHRSA and Fitness First Australia have pledged $135,000 to fight the issue and are looking for Australian health clubs to match these funds. The current Fitness Class Tariff in Australia, which is paid to the Phonographic Performance Company of Australia (PPCA), is an Australian dollar value of $0.90 ($0.80 USD) per class with an annual cap of $2,654 ($2,302 USD). The PPCA has been studying how music is valued and is suggesting that the proposed fee either be increased to $31.67 ($26.89 USD) per class with no cap — an average increase of 3,172 percent per club — or that clubs be charged a rate of $26.08 ($22.55 USD) per member per month.

Fitness Australia says it plans to challenge the model that the PPCA is using to value music in health clubs.

“Either scenario would devastate the industry and has serious implications for clubs in other countries, since PPCA sister organizations around the world may well decide to restructure their fees in a similar way,” Joe Moore, president of IHRSA, says in the statement. “For the sake of the global industry, we need to stop this issue in Australia.”